API: State of American Energy Address

Below are highlights from the API’s State of American Energy Address 2015 delivered by Jack N. Gerard, API President and CEO.

“Since the first State of American Energy report in 2011, our nation has not only left behind decades of energy scarcity but has become a worldwide leader in energy production. Today:

The US is number one in natural gas production.

Number one in petroleum refining.

Expected to become the number one producer of crude oil as early as this year though some project we are already there.

“During this new era our nation has not only set production and refining records, which has created 600 000 jobs between 2009 and 2011. It has also added significantly to global energy supply leading to reduced prices benefitting consumers. According to a Goldman Sachs economic analysis, the 60 cent drop in the price of a gallon of gas by the end of 2014 had the equivalent economic impact on the US’ economy of a one time tax cut of between US$100 billion and US$125 billion.

“Another study estimates that for every 1 cent drop in the retail price of gasoline for a year, American consumers save US$1.2 billion. America’s emergence as a global energy leader has fundamentally reordered the world’s energy markets, by elevating the importance of North American energy production and reducing what had been the dominant roles of OPEC and Russia. And if we get our energy policy right, this unique American moment could support millions of well paying jobs and expand the participation of traditionally underrepresented groups, which will be critical to fulfilling our nation’s bright energy future.

“We know that for the next 7 – 10 years approximately half of the industry’s current technical personnel will retire. Replacing these jobs and creating new ones presents an historic opportunity to create an oil and natural gas workforce that reflects the increasing diversity of our nation.”

Minorities and leadership

“To better understand the scope of this economic opportunity API commissioned a report, ‘Minority and Female Employment in the Oil & Gas and Petrochemical Industries,’ which estimates that over 950 000 job opportunities could be created by 2020 and nearly 1.3 million job opportunities through 2030 across the country in the oil and natural gas and petrochemicals industry. At a minimum the report estimates that African American and Hispanic workers could make up nearly 20% of new hires in management, business, and financial jobs through 2030. More important, the report outlines how we can increase minority participation in our nation’s energy renaissance, which will be critical to taking full advantage of America’s energy potential.

“As this New Year begins we stand at the threshold of a sustained era of American global energy leadership. This unique American moment is the result primarily of American ingenuity and technological advancements in hydraulic fracturing and horizontal drilling. We have the opportunity to permanently diminish what have been our nation’s energy needs. We should transcend political parties. It should not be about Republicans, Democrats or Independents; it’s about all Americans benefitting from our nation’s emergence as an energy leader. Broadly, it is about ensuring that America remains a positive force on the world energy market.”

Support development

“American voters have a clear preference for increased domestic energy production, specifically more US oil and natural gas. To gauge the depth of support, API commissioned an election night poll, which found that 66% of voters said they would support candidates who back increased oil and natural gas production. And support for increased energy development is strong regardless of party affiliation; 55% of Democrats, 61% of Independents and 82% of Republicans said they are more likely to vote for candidates who support expanded oil and natural gas production.”

“We want to work with this new Congress and the administration, as well as our colleagues in other energy sectors joining us here today, to usher in an enduring era of cooperation and forward looking energy policy for America, a true all of the above approach, and to create within the American political landscape a more productive approach to national energy policy. Fundamentally, we have a choice as a generation, as a nation and as an international community to rise to the challenge of meeting the energy needs of a growing worldwide population or to shrink from it.”

Fossil fuels

“The fact is fossil fuels will continue to take the lead in providing most of the world’s energy needs well into this century. The US EIA estimates that 25 years from now, oil, natural gas and coal, collectively will account for 80% of the country’s energy consumption. That same report estimates that renewable energy sources will grow to 12% of our energy mix, with the remaining 8% coming from nuclear power. Even under their most aggressive scenario, fossil fuels still account for 65% of our energy needs. We need to make sure that the small but vocal view of those who peddle the false choice between energy production and safe environmental stewardship do not prevail in their narrow view which is contradicted by the facts.”

“Worldwide, EIA projects demand for liquid fuels will increase by 25% in the next 25 years, driven by the development of emerging markets and nations as they lift themselves out of poverty, improve their standard of living, and increase the economic opportunity of their citizens. And according to the IEA, one fifth of the world’s population, or 1.3 billion people, lack access to electricity entirely and almost half of the world’s population lacks access to reliable electricity. We have an opportunity and, I believe, a responsibility to use our nation’s vast energy resources to help meet the world’s ever growing demand.”

Misguided policy

“A good example of a bad energy policy still mired in the past is the Renewable Fuel Standard. Every year American consumers pay more for their fuel and are put at risk by this dangerous historical anachronism. Created at a time of energy dependence and domestic energy security, it has outlived its usefulness, and could create serious fuel supply disruptions and by some estimates a rise in the cost of gasoline by as much as 30% and diesel fuel by as much as 300%. As it stands, EPA’s inability to manage this program, they are two years behind mandated timelines for renewable fuel volumes, leaves US refiners in the dark about regulatory requirements. Multi billion dollar industries cannot run on guesswork. Ultimately, Congress needs to act to correct it since a well intentioned Congress created the problem.

“Another example of misguided energy policy that harms American consumers and businesses is the ever increasing environmental regulations that do little or nothing to advance public health but instead significantly harm our nation’s energy production potential and global energy leadership. While current ozone regulations are protecting public health, and will continue to make gains under existing rules, the EPA’s recently proposed tighter limits on ozone would, according to a recent NERA report, be the most costly regulations ever imposed on the American people. At a potential cost of US$270 billion per year the proposed ozone regulation places millions of jobs at risk by, among other things, imposing enormous additional operating costs on America’s world leading refineries.”

“We should no more adopt or tolerate policies that pull us back toward energy dependence and uncertainty than we should adopt policies that reverse gains we’ve made in other areas of our society.”

“Energy is central to our way of life and we will need more of it for many years to come.”